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Court overturns waiver denial under Income Tax Act, stresses fair hearing, sets 8-week deadline for reconsideration. The court set aside the order rejecting the waiver application under Section 220(2A) of the Income Tax Act due to lack of effective hearing by the second ...
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Court overturns waiver denial under Income Tax Act, stresses fair hearing, sets 8-week deadline for reconsideration.
The court set aside the order rejecting the waiver application under Section 220(2A) of the Income Tax Act due to lack of effective hearing by the second respondent. The matter was remanded for fresh consideration, directing the second respondent to provide a reasonable opportunity for a personal hearing to the petitioner. Compliance with the law was emphasized, and the court instructed the second respondent to dispose of the application within eight weeks. The writ petition was allowed without costs, highlighting the significance of procedural adherence and fair hearings in such cases.
Issues involved: Challenge against the order rejecting waiver of interest under Section 220(2) of the Income Tax Act due to lack of effective hearing.
Analysis: The petitioner filed an application seeking waiver of interest under Section 220(2A) of the Income Tax Act due to financial constraints. The first respondent had earlier approved an installment scheme for the petitioner, which was successfully completed. However, the second respondent rejected the waiver application without granting an effective hearing to the petitioner, violating the mandatory provision of affording the assessee an opportunity to be heard as per the Income Tax Act.
The learned counsel for the petitioner argued that the lack of personal hearing for the petitioner or its representative before passing the rejection order by the second respondent was a clear violation of the second proviso of Section 220(2A) of the Income Tax Act. It was contended that the order passed without a hearing is against the mandatory provisions of the Act, warranting interference solely on this ground.
In response, the respondents contended that the order was passed on merits and followed the required procedure. However, the court found that the second respondent had indeed failed to provide an effective or reasonable opportunity for the petitioner to be heard before passing the order. The court held that the second respondent's actions violated the provisions of the Income Tax Act, especially the requirement for affording personal hearing to the assessee before making a decision on waiver applications.
Consequently, the court set aside the impugned order rejecting the waiver application and remanded the matter back to the second respondent for fresh consideration. The second respondent was directed to follow the procedure under Section 220(2A) and provide a reasonable opportunity for personal hearing to the petitioner. The second respondent was instructed to dispose of the waiver application within eight weeks from the date of the court's order, ensuring compliance with the law.
In conclusion, the writ petition was allowed without costs, and the connected miscellaneous petition was closed, emphasizing the importance of adhering to procedural requirements and providing a fair hearing to the parties involved in such matters.
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